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Empire Justice Testimony at the Roundtable Discussion on the Issues and Concerns of Human Services Administrators, Advocates and Clients

The Senate Committees on Social Services & Children and Families



February 9, 2012

Monroe County Administrative Building, Rochester, NY

 

Prepared by:

Kristin Brown

Susan C. Antos

Rebecca Caico

Don Friedman



Presented by:

Rebecca Case-Grammatico, Senior Attorney


Introduction

Thank you for the opportunity to testify today.  My name is Rebecca Case - Grammatico, and I am a Senior Attorney in the Rochester office of the Empire Justice Center.  We are a statewide legal services organization with offices in Albany, Rochester, White Plains and Central Islip (Long Island).  Empire Justice provides support and training to legal services and other community-based organizations, undertakes policy research and analysis, and engages in legislative and administrative advocacy.  We also represent low-income individuals, as well as classes of New Yorkers, in a wide range of poverty law areas including consumer, predatory lending, public assistance, child care, child support, and disability benefits.

My testimony today will focus on four issues that Empire Justice Center has identified as critical to the well being of low income New Yorkers, especially families, children and single adults.  Those issues are: the desperate need to invest in child care assistance for low income working New Yorkers, the economic impact of foreclosure on New York’s children and families, improving identification of disability screening for welfare applicants and sanction policies, and finally, the importance of full implementation of the final phase of the welfare grant increase.

1) Low Income Working Families Lose Child Care Subsidies as Local Social Services Districts Struggle with Reduced Funding

This year, New York State has $70 million less to spend for child care than it did in 2009-2010 and $60 million less than it had in 2010-11.  Even with the Governor’s addition of $93 million in state funding to the New York State Child Care Block Grant (NYSCCBG), the proposed budget reflects an overall reduction in child care funding from over $974 million in 2009-2010 to $904 million in the Executive Budget submitted to the legislature this January.  This is because the NYSCCBG is primarily funded with federal funds - the federal Child Care Development Fund and the Temporary Assistance to Needy Families (TANF) Block Grant - and both of those funding streams have been reduced.  Additionally, in fiscal years 2009-2010 and 2010-2011, the State was able to increase the NYSCCBG using federal American Recovery and Reinvestment Act (“ARRA”) funds.

Child care faced a particularly huge crisis this year because of Congress’s total elimination of the federal TANF Emergency Contingency Fund (ECF).  Historically, New York State has transferred a portion of the TANF ECF to the NYSCCBG.  As a result of the elimination of the ECF, the TANF transfer into the NYSCCDBG was reduced in the Governor’s budget by $93 million.  The Governor has restored this significant loss with an equal amount of state funding, which essentially maintains child care at close to the same amount as in last year’s budget – an investment we are grateful for.

Under State Law, families with incomes up to 200% of poverty are eligible for financial assistance to pay for child care.  Families that are not on public assistance pay a family share, or copayment, as their income increases.  Here are some examples of the harm caused to working families when counties are provided inadequate funding for child care:

  • Albany County stopped taking applications for child care services from working families as of April 23, 2010.  This moratorium lasted for over one year. [1]  When the county began accepting applications again, it was only able to do so for families under 125% of poverty.  Because Albany County is served by a facilitated enrollment (FE) program administered by the Workforce Development Institute (WDI), that program, which was originally intended to serve people between 200% of poverty and 275% of poverty, began serving families with incomes over 125% starting in June, 2011.  In December of 2011, additional dollars were allocated for facilitated enrollment in a supplemental state budget, which saved many child care slots in a number of upstate counties. [2] There is no new facilitated enrollment funding in the Governor’s proposed 2012-13 budget.  WDI will only be able to continue serving these families if additional facilitated enrollment funding is included in the 2012-13 budget
  • Columbia County is no longer processing child care applications for working families as of November, 2011. [3]
  • Dutchess County lowered eligibility guidelines for working families from 200% of poverty to 150% of poverty in January of 2011.  In July of 2011, the eligibility level was lowered to 125% of poverty as families recertified. [4]
  • Erie County lowered its eligibility guidelines for low income working parents from 200% of poverty to 125% of poverty effective March 5, 2010, leaving 1,100 children in 700 families without child care. [5] Erie County was able to partially restore eligibility to 175% of poverty effective June 1, 2011. [6]
  • Fulton County discontinued payments to 140 families in October of 2011. [7]  Some families had their subsidies restored the following month when the County Board of Supervisors was able to restore some of the funding. [8]
  • Monroe County: At least as early as November, 2010, Monroe County began denying ALL income eligible applications for child care assistance on the basis that they had “insufficient funding …to accept new applications.”  These denials continued through at least September, 2011. [9]
  • New York City: In September, 2011, New York City closed all cases in the categories of homeless, employment and educational/vocational if the family’s first date of service was on or before April 3, 2006. [10]
  • Oneida County stopped processing new applications for child care and discontinued benefits for those in education and training in November of 2011. [11]  In early December 2011, the County announced that it was ending child care subsidies for all families over the federal poverty level. [12]  This affected 425 families, or 30 percent of the 1,375 local families receiving subsidies. [13]  As a result of facilitated enrollment dollars allocated in the supplemental state budget of 2011-12, the Workforce Development Institute was able to reinstate child care assistance to 250 of those 425 affected families.  However, the allocated funding will only support these families until March 31, 2012.  WDI will only be able to continue serving these families if additional facilitated enrollment funding is included in the 2012-13 budget. [14]
  • Rensselaer County has not served families above 180% of poverty since at least 2006, and WDI serves those over that amount. [15]
  • Schenectady County reduced eligibility to 175% of poverty and then to 150%.  As a result of the December facilitated enrollment allocation, and previous WDI allocations, WDI was able to serve the affected families effective November 10, 2011. [16] 
  • Suffolk County: On December 20, 2011, the County mailed notices to all families with income over 185% of the poverty level advising them that they could no longer afford to pay their subsidy.

   
Every dollar invested in child care saves a job for a working parent and creates a job for a child care provider.  Further, since all parents share in the cost of child care by making co-payments, this is a cost that is shared by workers and the government.  It is a solid investment in job creation. 

  • At a minimum, New York should invest an additional $70 million to bring our child care investment to the 2009-10 levels.

 

2) Welfare Grant Increase


The always challenging work of nonprofit agencies serving poor New Yorkers faces a nearly insurmountable obstacle when the safety net is in tatters.  A striking example of this dilemma arises when a family’s need is so great that they must turn to the public assistance program for their subsistence. 

In the 22 years since 1990, the cost of living in New York has risen by more than 70%.  During that period, the welfare grant in New York has increased by 20%.  The grant has thus, for many years, ensured that poor New York families have increasingly greater difficulty in meeting their most basic needs, forcing them – and those who seek to assist them – to focus more on their survival than on doing what needs to be done to improve their lives. 

The stereotype of the non-working, undeserving welfare recipient is overwhelmingly invalid, a point driven home with particular force during this deep and prolonged recession, in which half of unemployed New Yorkers have been out of work for more than six months.  A large majority of those who receive welfare remain on the rolls for relatively short periods of time, many have been employed before receiving assistance, many will leave welfare for employment, and, indeed, many are working while receiving aid.   Many of those who are not as firmly linked with the labor market have a range of serious limitations, struggling with mental or physical disabilities, very limited levels of literacy and educational attainment, or domestic violence.  The public assistance grant should afford these people the capacity to meet their most basic needs with their dignity intact.

In 2009 and 2010, the first two phases of a scheduled three-step increase in the public assistance grant took effect, representing the first increase in the basic allowance in 19 years.  In 2011, the State failed to implement the final stage of this modest grant increase and now the Governor’s budget proposes to further delay implementation of the third and final installment by phasing in half of the third step this year and half next year.  If this proposal is adopted, a modest increase in the already severely inadequate welfare grant will have taken five years, instead of the intended three, to be fully realized.

Even when fully implemented, the maximum grant will still bring families to an income level that is less than half of the federal poverty level.   The final phase of the grant increase amounts to $35 per month for a family of three.  In Erie County, the maximum grant for that family of three will rise from $654 per month to $688, or 44% of the poverty level.  Even with food stamps added in, the household income will fall well under 75% of the poverty level.   This grant plus food stamps theoretically enables families to meet their essential needs, including such basics as rent, food, utilities, clothing, transportation and school supplies.  But the reality is that these benefits do not come close to achieving that objective.

Non-profit agencies provide a crucial array of services for poor households across the State.  But they are often compelled to devote inordinate time and resources on costly, disruptive emergency efforts to prevent evictions and utility shut-offs, to shelter the homeless and to feed the hungry.  One undeniable factor in this situation is the inadequacy of the safety net, especially the welfare grant. 

  • At a bare minimum, the insufficient but essential increase pledged by the legislature and the governor in 2009 must be implemented in the 2012 session. 

 

3) Work-Related Sanctions

A significant number of people who receive or apply for public assistance benefits have physical and/or mental disabilities that limit their ability to perform the full range of daily functions.  Unfortunately, the welfare system is ill-equipped to recognize these disabilities, and therefore too often fails to make needed accommodations for disabled individuals.  As a result, the person with disabilities is often assigned to inappropriate activities and is ultimately sanctioned, punished for failing to comply with the work-related requirements.  In New York City, where a large majority of the state’s welfare recipients reside, at any given point in time nearly a quarter of the employable public assistance population is either being sanctioned or in the midst of the sanction process.  Indeed, being punished or being threatened with punishment are among the most common “activities” in which clients are engaged. [17]  This is a clear sign of a dysfunctional and unduly punitive system. 

For agencies serving poor New Yorkers, sanctions can be disruptive in at least two important ways.  First, if the person has been engaged in educational, training or skill-building activities, the sanction might well result in a suspension of his or her participation in those activities.  Second, sanctions result in a substantial reduction of benefits, even more so if the household is receiving any special rental assistance.  The inevitable emergencies induced by sanctions and the struggle to protect the family become the priority of the client and the agency, leaving all other activities in a precarious position at best.  These vulnerable people and the non-profits that work with them would be much better served if there were procedures in place to prevent these crises from occurring.

Empire Justice supports two legislative proposals to address these problems.  But before describing the legislation, it is instructive to review five principles that guide this initiative:


a) Public assistance recipients are much more likely to have serious disabilities than is the case for the population in general, and are even more likely to have disabilities than other low-income people. [18]  
b) In the welfare system, disabilities frequently are not recognized, and therefore needed accommodations are not made.
c) People with serious physical or mental health limitations that are neither identified nor accommodated within the welfare system are often less equipped to comply with work requirements and are therefore at much greater risk of sanction.  Individuals with lower levels of literacy and education are also more often sanctioned. [19]    
d) Given the extremely modest benefit that is provided in the public assistance grant – less than half the federal poverty level – any reduction is likely to cause serious hardship.  Not surprisingly, parents and children in sanctioned families are much more likely to experience hunger and food insecurity, declines in health, hospitalization, eviction, homelessness, loss of utility and telephone service, and the need for emergency services, including emergency housing, food and clothing aid. [20]
e) For many reasons, sanctions are often imposed in error.  This may be because the client’s appearance at an assignment was not duly recorded, notice to the client affording the opportunity to challenge the sanction did not fully or clearly explain the situation or such notice was not timely sent, or because the non-compliance was the result of a disability of which the agency was, through no fault of the client, unaware. [21]  

It is this set of facts that has prompted advocates, including the Empire Justice Center, to endorse two pieces legislation.  One would improve the process by which local agencies identify clients with disabilities.  The other would serve to prevent unwarranted sanctions, particularly when imposed on clients with disabilities. 

Screening for Disability:

Few departments of social services around the state have in place an effective means of evaluating clients for disabilities.  There tends to be no screening for disabilities except to determine whether the client is employable and can be assigned to work programs.  And when screening is provided, the State Office of Temporary and Disability Assistance (OTDA) offers little in the way of guidance or oversight.  Many districts don’t screen at all, or, if they do, they conduct evaluations that are seriously flawed.

Our proposed screening legislation would do the following:

  • Ensure that local districts offer applicants and recipients the opportunity to be evaluated for disability soon after they come to the agency for assistance and at other times as well, including if it appears that recipients are having difficulty complying with assignments for reasons that may relate to a disability;
  • Require the State Office of Temporary and Disability Assistance (OTDA) to develop a high quality tool for screening for physical and mental disabilities, including learning disabilities, and require that districts use this tool or a reasonable equivalent to evaluate clients;
  • Provide that if the initial screening suggests a possible disability, the client must be offered the opportunity for a more in-depth evaluation by a qualified professional;
  • Require that, if the evaluation process indicates the presence of a disability, the client must be offered appropriate accommodations to ensure access to the benefits for which s/he is eligible.


Protection Against Inappropriate Sanctions:

What is needed in the realm of the public assistance work requirements is a system in which clients have the opportunity to participate in appropriate work activities, but are not punished if their failure to participate is the result of disabilities or other circumstances beyond their control.  In order to protect against unwarranted sanctions, the proposed legislation would require that:

  • Before imposing a sanction, districts must determine whether the alleged failure to comply was related to a disability, a problem with child care or transportation difficulties;
  • Mandatory durational sanctions, with their inflexible punishment periods of reduced benefits, are eliminated.  Instead, a sanction can be avoided, or can be lifted if already in effect, if the client demonstrates a willingness to come into compliance with the work requirements, or establishes that she or he is unable to do so;
  • A client who is otherwise satisfactorily participating in assigned work activities must not be sanctioned for a single infraction.


We believe that these two proposals would go a long way toward ensuring that no New Yorker is excluded from urgently needed benefits programs because of a disability.  The result would be a much more humane but also more functional welfare system, in which people with disabilities are properly accommodated and engaging people constructively rather than imposing harsh punishments is the institutional objective. 

4) The Economic and Personal Impact of Foreclosure on New York’s Children and Families

I would like to change the conversation to an issue that our agency faces daily.  The ripple effect of foreclosures cannot be underestimated.  The loss of a home in a foreclosure auction negatively impacts the state, local municipalities, the local neighborhoods, the family and children of the home foreclosed upon.  According to a May 2009 report by The Urban Institute entitled The Impacts of Foreclosures on Families and Communities, “when foreclosures occur, the families living in foreclosed properties are almost always obligated to move, but other effects may well touch on virtually all aspects of their well-being.”  The report further notes that the “lack of a stable home can negatively influence behavior and social development.  Frequent school change is related to poor academic performance and educational attainment.”  In addition to the harm caused to the family, the impact of the foreclosure reaches local municipalities, not only through lost tax revenue as a result of lowered property values, but also from the expenses related to a foreclosed home which range from the cost of cutting grass to the cost of demolition of a vacant property that has attracted crime and public health issues.

The impact of a single foreclosed home is more profoundly felt the more urban the environment.  According to research looking at buildings that are over-mortgaged or have gone into foreclosure from the Citizens Housing and Planning Council, funded by Enterprise, in a study titled The Impact of Multifamily Foreclosures and Over-Mortgaging in Neighborhoods in New York City “… at a minimum… over-mortgaged buildings are likely located in neighborhoods with a housing stock at risk of deterioration.  As a result, the troubled over-mortgaged buildings and their surrounding areas warrant the continued, and possibly heightened, expenditure of public resources for both ongoing monitoring and direct intervention to prevent deterioration in these communities”

Further, the study shows “… the average number of C housing code violations placed (the most serious violations that can be placed on properties) over the two year period studied (2008-2010) increased 13.7% in buildings located within 250 feet of an over-mortgaged building.  Buildings outside of a 250 feet radius only increased their average C housing code violations by 6.3%.”

a) Delinquency Trends and the Economic Impact on New York State – Past, Present and Future Predictions

Empire Justice Center has been analyzing statewide delinquency and foreclosure data since 2007.  Our first report, “The Mortgage Meltdown,” produced in 2007, focused on subprime lending and delinquency data.  That report identified concentrations of loans at risk and for the first time highlighted Long Island as a heavy hit area.  Prior to the report, it was well known that Queens and Brooklyn had significant numbers of subprime loans, but the problem on Long Island had not yet been identified.

The delinquency and foreclosure trends noted in our first report continued and intensified as shown in our “Mortgage Meltdown II” report released in March, 2011.  The report showed an overall increase in delinquency rates occurring across the state and confirmed what was already apparent to service providers: that the recession and job loss was taking its toll and that the number of delinquent and foreclosed prime loans had overtaken the number of subprime.  This report also identified a disturbing trend, in which the number of homeowners in delinquency exceeded the number of homeowners in foreclosure as of the date of the data.  Our conclusion, drawn from the data, was that while the rest of the nation is widely viewed to be approximately a third of the way through the foreclosure crisis, New York is closer to halfway through.  Clearly this prediction will worsen should economic conditions in New York fail to improve, or should any of the components of our foreclosure response, such as the homeowner assistance provided through the Foreclosure Prevention Services Program, are lost.

b) The Current State of Foreclosure

Our most recent analysis using March, 2011 data obtained from the Federal Reserve Bank of New York allowed us to estimate that over 250,000 homes in NYS are either in foreclosure or about to enter foreclosure.  The first wave of the foreclosure crisis was composed of homeowners who had received abusive loans that were unaffordable or became unaffordable in the first few years of the loan being made.  The current face of the crisis includes not just homeowners who received abusive loans but homeowners who have traditional, prime loans that are in foreclosure as a result of lost income.  We are at a time in our economic history that one can play by the rules and do all the right things and still face homelessness.  While we are already familiar with the human and social costs of the foreclosure crisis, the full economic impact will not manifest right away.  Hundreds of thousands of homes are in the foreclosure pipeline.  


No part of the state is immune to this crisis.  While the majority of foreclosures are in New York City and on Long Island, 46% of all foreclosures are in upstate urban and rural counties.  As of March 2011, on average, 10% of mortgages in New York were more than 60 days delinquent or in foreclosure.  At the county level, foreclosure rates generally fall between 6 percent and 14 percent, meaning that foreclosures continue to be a significant problem in every county of the state and are not isolated to the counties with the particularly high numbers of homes in distress. 

As noted above, rates of foreclosure in counties across the state are consistent in both urban and rural areas.  Forty-nine of the state’s sixty-two counties (nearly 80%) are within 3 percentage points of the state median of 8.6%.  Several of the counties with very high foreclosure rates are those counties with the largest populations of homeowners (Bronx, Suffolk, and Queens).  However, several rural counties are included in those with the highest foreclosure rates (Sullivan, Broome, Washington, and Montgomery).  

The top 10 counties in New York with the greatest estimated number of foreclosures also include a mix of upstate and downstate counties, and are from almost every region of the State (Suffolk, Queens, Nassau, Brooklyn, Westchester, Orange, Erie, Monroe, Bronx, and Staten Island).

The impact of the foreclosure crisis on neighborhoods remains significant.  While every community is impacted by foreclosures, most of our data is looking at the county level.  This masks the fact that foreclosures are not spread out evenly across counties; they are concentrated in certain neighborhoods.  Indeed, in many neighborhoods 1 in 3 or 1 in 5 mortgages are in foreclosure.  This concentration means that market forces will not be sufficient to address the crisis.  As we move forward, we believe that continued funding for the Foreclosure Prevention Services Program will help limit the destructive impact in these communities, which will be critical to their very survival.  Vacant homes resulting from foreclosures will result in a downward spiral of prices impacting homeowners who are current on their mortgages and not underwater, resulting in a continued loss of wealth in these neighborhoods.

Another indicator of the current crisis is illustrated by a new report released in January, 2012 from NEDAP entitled Foreclosures in New York: What’s Really Going On.  According to the report, “more than 345,000 mortgages were in default or delinquent in New York State, in 2011.”  This number, which is based on the mandatory 90-day notices that must be sent to all homeowners 90 days before a foreclosure is filed, “indicates severe mortgage distress and risk of foreclosure and destabilization for huge numbers of families and communities throughout the state.”


c) New York has Taken a Proactive Approach to the Foreclosure Crisis

New York’s legislature has been among the most aggressive in the country to address the subprime and foreclosure crises since 2008.  Thanks to thoughtfully crafted statutory protections and strategic investments in homeowner assistance, New York was the second highest of only 11 states to experience home price appreciation in 2010, and we are fourth in the nation in terms of loan modifications achieved through the federal Home Affordable Modification Program (HAMP).  We strongly believe that New York is poised to exit the foreclosure crisis ahead of most other states, but only if we stay the course with current programs and activities and continue to be aggressive and nimble in addressing emerging issues.
 
New York is considered a model state [22] for its foreclosure settlement conference program established in 2008.  The settlement conferences have succeeded in reducing the number of homes lost to foreclosure and in keeping people in their homes.  Prior to the institution of mandatory settlement conferences in New York, over 90 percent of foreclosures ended in default judgment against the homeowner.  That means that in nearly all of the foreclosures filed, the borrower never filed an answer or otherwise appeared in the case, and the home was lost to a foreclosure sale with no participation on the part of the homeowner. 

We believe the biggest reasons for this were the lack of understanding of the legal process, as well as the lack of available assistance to homeowners.  Considering a foreclosure is one of the most detrimental lawsuits that can be filed against a family, these figures are appalling. 

The settlement conferences have provided a forum and a more consumer-friendly opportunity for borrowers to appear on their own behalf in foreclosure filings.  Having a date set for homeowners to appear before the court has proven a more successful method to engage defendants in their defense of foreclosure actions.  According to the report provided by the Office of Court Administration in November 2010, approximately 50 percent of homeowners appeared for the conference in just the first nine months that the conferences were extended to all residential foreclosure actions.  This appearance rate is certainly a stark contrast from the 90-plus percent figure of default foreclosures that existed prior to the conferences. [23]    

According to the most recent report provided by the Office of Court Administration in November 2011, approximately 90 percent of homeowners appeared for the conference between November 2010 and September 2011.  Notably, for homeowners outside New York City, 41% of all appearing homeowners were represented by counsel.  Unfortunately, the report also highlights the court’s concern about the loss of funding for the Foreclosure Prevention Services Program:


“The availability of representation for defendants who cannot retain counsel is a paramount concern, because it impacts directly upon the success of the conference process and the ability to reach settlement. Initially, over the course of the first years of the settlement conference program, there was an increase in legal representation.  Currently, however, with the onset of budget restraints and cuts, we are concerned that gains we have made are being lost.”

d) Impact of Loss of Funding for Direct Services for Homeowners

As noted by the Court, one of the critical components to the success of the settlement conferences have been the direct services that have been made available to homeowners and the efforts in New York State law to connect borrowers in default with housing counseling and legal services assistance.  Increased resources for courts and adequate funding of the Foreclosure Prevention Services Program to provide direct assistance for homeowners would improve both the efficiency and the effectiveness of the conferences significantly.  In 2008, the state took a leadership role by funding the Foreclosure Prevention Services Program which provided the glue for a network of housing counseling agencies, legal service providers, and pro bono assistance programs to cooperate on local levels with the local courts to ensure an efficient and effective method for homeowners to obtain quality assistance during the foreclosure process.  The program was financially renewed in 2010, allowing the network of agencies to continue direct assistance to homeowners.  However, so far the Governor has refused to include money in his Executive Budget for a program that has shown to have a real impact on families and communities facing the foreclosure crisis. 

Simply stated, the impact of the loss of funding for direct services throughout New York will be devastating.  In many counties, especially rural counties, services will go away completely. [24] Agencies have already given pink slips to some of their direct service providers, reduced hours to extend dollars further, or have made employees aware that their jobs are at risk if funding is not continued.  Intake of new cases has slowed and sometimes, stopped completely.  New triage systems aimed at helping homeowners in bulk are already implemented.  The bottom line is that fewer homeowners will preserve homeownership and receive affordable loan modifications absent the direct assistance we have been able to provide in New York since 2008.  The economic consequences for New York State will be devastating.

We cannot speak for the courts, of course, but predict that the impact of the loss of services for homeowners would be great for them, as well.  Empire Justice has conducted trainings for judicial staff in almost every judicial district of the state over the past year.  Local legal services providers and housing counselors have made great efforts to reach out to their courts to make them aware of their services and in turn, many courts have created systems to best ensure borrowers avail themselves of these services. [25]  Feedback from the trainings we’ve conducted evidence that the courts have come to rely on the availability of direct services for homeowners.  The loss of services will further tax judicial resources, and impact the efficiency and effectiveness of the settlement conferences.


e) Impact on the State with the Foreclosure Prevention Services Program Funded

Since the Foreclosure Prevention Services Program started in 2008, over 80,000 homeowners have been assisted and at least 14,000 homes have been saved from foreclosure.  Every dollar invested in foreclosure prevention through the Program has resulted in a $68 savings to the state.  This is due to the avoidance of decreased property values and subsequent decreased tax revenue.  It is estimated that, to date, the Program has saved over $3.4 billion across New York State.  If nothing is done to help the more than 250,000 homes entering foreclosure, the cost would total over $61 billion in decreased property values and reduction in tax base. 

f) Foreclosure Relief Unit within Department of Financial Services (DFS)

The Governor announced in his State of the State address, and included in his Executive Budget, the creation of this new unit in DFS, which is a new Department merging Insurance and Banking Departments, launched Oct. 3, 2011.  To date, few details have been revealed.  Empire Justice has shared ideas with the Department and encouraged formalizing their role as an escalations unit to assist legal services and housing counselors when they are having particular difficulty working with a mortgage servicer.  So far, the new unit has announced that they are providing “a state-run mobile command center staffed with foreclosure counselors” who provide information about loan modifications available under federal law and “take complaints from homeowners who believe they were subjected to lender or mortgage servicer abuses so these cases can be investigated by the department.” [26]

Clearly this new Unit cannot replace the on the ground network of experienced housing counselors and legal services attorneys working on an ongoing basis – often for years -  with  homeowners to help them find the right solutions for their families.  To keep the same level of services that have been provided over the course of the program – until December 31, 2011 - $25 million in funding for the Foreclosure Prevention Services Program must be restored to the 2012-13 State Budget. 

Thank you once again for the opportunity to testify today.  Please feel free to contact me at 585-295-5725 or rcase@empirejustice.org should you have any questions.

End Notes:
 [1] FH #5796111J(6/8/11), available at: http://otda.ny.gov/oah/FHArchive.asp
 [2] The 2011-12 supplemental state budge allocated $7 million in funding for facilitated enrollment, of which $1,540,00 went to WDI and was allocated as follows: $320,00 – Albany, $836,000- Oneida; $180,000 – Schenectady, and $50,000 for Rensselaer.  The remainder of the funding was used to administer the program. Telephone conversations with Susan F. Hains, Director of Health and Human Services Programs, Workforce Development, 2/3/12,2/7/12.
 [3] W.T.Eckert, Agency Presents New Five Year Plan, Hudson Register Star, published November 8, 2011 at http://www.registerstar.com/articles/2011/11/08/news/doc4eb8bb2d3d5a2684323416.txt
 [4] FH # 5954394N ((1/26/12), available at: http://otda.ny.gov/oah/FHArchive.asp. Telephone call with Jeanne Wagner,  Child Care Council of Dutchess, Inc., 2/1/12
 [5] M. Spina, Day Care Practices Prompt Questions, Buffalo News, February 14, 2010, updated August,21, 2010 at http://www2.erie.gov/comptroller/sites/www2.erie.gov.comptroller/files/uploads/pdfs/2-14-10%20Buffalo%20News%20Day%20Care%20Practices%20Prompt%20Questions.pdf
 [6] FH #5838751N (8/19/11)
 [7] Fulton County Drops Childcare Funding Until Further Notice, October 27, 2011 http://www.wten.com/story/15895948/fulton-county-suspends
 [8] J. Studd, Fulton County Board Extends DSS Child Care Through End of 2011, Amsterdam Recorder, November 7, 2011 at  http://www.recordernews.com/news/11172011_daycare
 [9] FH #5681172J((4/20/11); FH#5791819H (6/30/11); FH #5873738J (9/28/11).
 [10] FH # 5778010Y (1/24/12), available at: http://otda.ny.gov/oah/FHArchive.asp
 [11] E. Cooper, Day care aid cut back as more families need help, Utica Observer Dispatch, November 22, 2011, at http://www.uticaod.com/communities/oneidacounty/x2128793826/Day-care-aid-cut-back-as-more-families-need-help
 [12] E. Cooper, More Day Care Cases to be Cut, Utica Observer Dispatch, December 1, 2011, at http://www.uticaod.com/m/news/x1622882900/More-day-care-cases-to-be-cut
 [13] Id.
 [14] See note 2, supra.
 [15] Id.
 [16] Id.
 [17] New York City data is used here because the same statistic, the percentage of engageable recipients being sanctioned or threatened with a sanction, is not readily ascertainable for the state as a whole.  The source of the NYC data is the Caseload Engagement Status Report for the week of December 25, 2011, from the website of the Human Resources Administration, www.nyc.gov/html/hra/downloads/pdf/citywide.pdf
 [18] See, for example, Loprest and Maag, “Disabilities Among TANF Recipients: Evidence from the NHIS Final Report,” The Urban Institute, May 2009.  One study cited in this report found that close to 30% of TANF recipients have serious disabilities.
 [19] See Nadel, Wamhoff, and Wiseman, “Disability, Welfare Reform, and Supplemental Security Income,” Social Security Bulletin, Vol. 65 No. 3, 2003/2004; Dan Bloom and Don Winstead, “Sanctions and Welfare Reform,” Brookings Institution, Policy Brief No. 12, January 2002, http://www.mdrc.org/publications/191/policybrief.html; Shawn Fremstad, “Recent Welfare Reform Research Findings:  Implications for TANF Reauthorization and State TANF Policies,” Center on Budget and Policy Priorties, January 2004.
 [20] Tim Casey, The Sanction Epidemic in the Temporary Assistance for Needy Families Program, Legal Momentum, August 2010, http://www.legalmomentum.org/assets/pdfs/sanction-epidemic-in-tanf.pdf.
 [21] See, for example, Public Advocate for the City of New York, “Hearing Problem: An Analysis of Human Resources Administrations Fair Hearing Outcomes in New York City,” October 2009, Brennan Center Strategic Fund, Inc., “Improving New York City’s Public Benefits System: A Key Role for Help Desks,” 2008.  http://www.childrensinstitute.net/
 [22] See report released on February 6, 2012 from the National Consumer Law Center titled Rebuilding America: How States Can Save Millions of Homes Through Foreclosure Mediation.  Throughout the report, New York is analyzed as a model state providing critical services to homeowners which helps save homes from foreclosure and limit the costly consequences of foreclosures in our communities.
 [23] Some regions, such as Staten Island, reported an appearance rate closer to 80 percent.
 [24] One example is Better Neighborhoods Inc. in Schenectady which is the only provider of housing counseling for Fulton and Montgomery Counties, directly funded under the Program.  BNI will be forced to cease services in these counties if funding is not continued.  Legal services in these counties are in the same position, and this will be happening in counties throughout NY.
 [25] Some courts have designated rooms in the courthouse to house legal services lawyers and counselors on settlement conference days to refer pro se defendants.  In other counties, the court would hold a pre-settlement conference session for new defendants in conjunction with legal services and housing counseling staff to better prepare homeowners and connect them with services.  Pro bono programs using lawyers trained through HCR’s Foreclosure Prevention Services Program and administered by funded bar associations, have added representation in some of the heavier hit counties, as well. 
 [26] See LIBN.com powered by Long Island Business News NY foreclosure mobile unit coming to Long Island published February 8, 2012 http://libn.com/2012/02/08/ny-foreclosure-mobile-unit-coming-to-long-island/